Nu Skin Delivers Strong Growth, Healthy Yield

Strong growth and a healthy dividend are not mutually exclusive. Nu Skin Enterprises (NUS) is a prime example.

The Provo, Utah-based firm markets anti-aging and nutritional products in 53 regions around the globe. It uses the direct-selling approach, where customers buy products from independent distributors and not from stores. Its products are sold mainly under the Nu Skin and Pharmanex labels.

Nu Skin's earnings fell in 2005 and 2006, but have climbed by double digits each year since. Sales grew by 4% to 24% since 2007. Profit has more than tripled since 2008, the year that Nu Skin launched its breakthrough ageLoc anti-aging line of products. The firm will unveil its ageLoc weight management system later in the year.

Last month, Nu Skin reported first-quarter earnings that rose 22% to 90 cents a share. Sales climbed 19% to $550.1 million. Revenue at its Greater China segment (Hong Kong, Taiwan and mainland China) jumped 90% to $175.7 million. Due to the strong performance, the company increased its guidance for full-year 2013 earnings and sales.

Nu Skin has steadily increased its shareholder dividend over the years. It currently pays a quarterly rate of 30 cents a share, which is up 150% since 2007. Nu Skin pays $1.20 each year, which works out to a yield of about 2% a share.

The stock looks as if it's been in one big consolidation since March 2012. But upon closer inspection, one could make out elements of a double-bottom base, with a middle-peak buy at 49.11. From that interpretation, it broke out in the week ended April 12 in healthy volume.

Nu Skin rallied 29% from the 49.11 trigger before pulling back. Last week, the stock nearly touched its 10-week line.

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